Celgene raises 2013 forecast as profit beats estimates

Reuters

By Bill Berkrot

Oct 24 (Reuters) - Celgene Corp raised its earningsforecast for 2013 on Thursday after reporting slightlyhigher-than-expected quarterly profit on robust sales of itsflagship blood cancer drug Revlimid and rapid growth in newercancer treatments.

While Revlimid remains the backbone of the company,Celgene's newer products are off to an impressive start.

Pomalyst, a multiple myeloma drug for patients who havereceived treatment with at least two prior therapies, had salesof $90 million in its second full quarter on the market, up 35percent from the prior quarter.

That included $77 million in the United States, outpacingAmgen Inc's new rival drug Kyprolis, which had sales of$65 million in the third quarter.

Celgene officials told analysts on a conference call thatPomalyst was rapidly gaining market share.

"Folks need to rethink their expectations going forward forthat drug," Cowen and Co analyst Eric Schmidt said. "It's justeasily besting our expectations."

Helped by its recent approval for pancreatic cancer inaddition to growing use in lung and breast cancer, sales ofAbraxane jumped 60 percent to $170 million, above expectationsof about $167 million.

Celgene is likely to add another potentially lucrative newproduct to its portfolio early next year. U.S. regulators areexpected to make an approval decision in March on apremilast forpsoriatic arthritis.

Excluding special items such as collaboration costs, Celgeneearned $1.56 per share in the third quarter, beating analysts'average expectation by 2 cents, according to Thomson ReutersI/B/E/S.

The results prompted Celgene to boost its 2013 earningsforecast for a third time this year. It now expects to earn anadjusted $5.90 to $5.95 a share, up from a previous forecast of$5.80 to $5.90 a share.

The company sees total product sales in 2013 exceeding itsprevious outlook of $6.2 billion, with Revlimid sales coming inat the mid to upper end of a $4.2 billion to $4.3 billion range.

The quarterly results, which exceeded analysts' estimates,may have fallen short of lofty investor expectations. Celgeneshares, which have doubled this year, were off 1.7 percent inmorning trade on Nasdaq.

"While this was a good quarter and a nice little beat andraise, people expected at least as much, if not a little more,"said Cowen's Schmidt. "So everything is great, but highexpectations may have the stock down."

Net profit for the quarter fell due to higher expenses forproduct launches and clinical trials. Net profit declined to$372 million, or 87 cents a share, from $424 million, or 97cents per share, a year earlier.

Revenue rose 17.6 percent to $1.67 billion, slightlyexceeding Wall Street estimates of $1.64 billion.

Revlimid sales increased 12 percent from a year ago to $1.09billion, in line with estimates. Revlimid sales were fueled bymarket share gains and by patients using the drug for longerperiods, the company said.

Its sales could grow significantly if it wins expandedapproval for use in newly diagnosed patients based on upcomingresults of a large, late-stage study.

Sales of Vidaza for the blood disorder myelodysplasticsyndrome were flat at $220 million and down 6 percent in theUnited States, where it began facing competition from a cheapergeneric version last month. The decline will accelerate rapidlyas multiple generics come onto the market.

Selling, general and administrative costs rose to $405million from $323 million a year ago, while research anddevelopment expenses increased to $372 million from $328million.

Chief Financial Officer Jacqualyn Fouse said SG&A expensesshould trend downward in the fourth quarter but that R&D costsmay go up.

Celgene shares were down $2.73, or 1.7 percent, at $157.27on Nasdaq.

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